After a four-year battle with the prodigious, seemingly intractable tech slowdown, Thomas Niccum and Lancet Software Development Inc. declared victory this spring.

In a sign of optimism that might have been unthinkable 18 months ago, the small tech firm bought its first office property after leasing space for its seven-year history. The company moved in this week.

For Lancet, which is hiring again after keeping tight reins on costs, the purchase reflects a belief that the tech drought has finally broken. Niccum said he has seen steady increases in business lately. "We wanted to make an investment before the market really took off," Niccum said.

Other tech companies, emboldened by what they see as a long-awaited shift in tech spending among customers, are taking similar steps. Charter Solutions Inc. of Minnetonka is hiring technology workers again after nearly three years. Corporate Contract Services Inc. (CCS), an Edina consultancy, is seeking warehouse space for gear needed by a networking subsidiary.

"Everything comes in a cycle," said R.J. Wolf, president of CCS, and lately the cycle has been a positive one. The company is expecting $3 million to $4 million in revenue this year, compared with $1.2 million in 2003.

Elmer Baldwin, CEO of Minnetonka consultancy Born, agreed the market was growing, though he said the pace was far from torrid. "It's a light wind, not a gale."

Dee Thibodeau, CEO of Charter Solutions, said that signs of an uptick began late last year. As firms grew confident, they turned to projects that had long sat on the back burner. "They're looking to invest again, putting some capital to work," she said.

Optimism is tempered by the fact that hopes have been dashed before. Tech companies thought that 2001 held the promise of an improved market -- until Sept. 11.

Not everyone agrees that a true rebound has arrived.

"You can see it when tech people get together and at first everybody says things are doing better, and then somebody will ask, 'What's it really like?'" said Mary Henschel, CEO of Network Arts of Golden Valley, a firm that consults on technology projects.

"Somebody else says it's still slow, and everybody relaxes and says, 'Oh, good. It's that way here, too.' "

Some areas haven't improved. Consulting fees, which had topped $100 an hour in early 2000, remain at least 20 percent less today, he said. Still, that's better than cuts of 40 or 50 percent at the nadir of the market.

"The forecast is good, but projects are smaller and the margins are tighter," agreed Baldwin.

Niccum said that surviving tech firms were actually helped by the severity of the bust, especially after Sept. 11. "Things got so bad, so quickly, that anybody who was shaky got knocked out right away," he said. "So there wound up being a fair bit of work to do."

Baldwin said he doesn't think it is over. "I think you'll see consolidation throughout the year."

As seen in:

The Business Journal

Software developer Tom Niccum is so confident he invested in a new building for his firm.